Repsol YPF and Petrobras Chairmen, Alfonso Cortina and Philippe Reichstul, today signed two agreements, in Madrid, setting the terms for an asset swap between the two companies.

The first of these agreements was in relation to joint studies undertaken by the two companies as per a Letter of Intentions signed last October 29^th, and will permit Repsol YPF to acquire downstream assets and increase its upstream activities in Brazil, and Petrobras to acquire downstream assets in Argentina and increase its upstream operations in the Southern Cone of Latin America.

The valuation of assets included in the Agreement should be completed by June 30^th next.

The second agreement signed today referred to an analysis of the steps to be taken by both companies, leading to joint ventures in the development of new natural gas markets in Latin America, both in the supply of gas and in power generation.

As customary in operations of this nature, both agreements are held as confidential.